This vote was on passing a bill that would give states $16.1 billion to increase Medicaid coverage and $10 billion to states for education funding, primarily to help stave off teacher layoffs. The bill would pay for this extra spending by spending cuts in other areas and new forms of revenue – for instance, the $10 billion for education funding would primarily come from curtailing the tax shelters some multinational corporations take advantage of by having a shell office somewhere overseas.

Democrats argued that the bill is necessary to help states facing budget deficits keep from shutting off important services; they say it would save the jobs of 160,000 teachers and 150,000 police officers and firefighters. The measure also would extend for another six months an expansion of Medicaid coverage originally enacted as part of the economic stimulus law. The stimulus raised the federal share of Medicaid payments – meaning, the portion of Medicaid benefits the federal government is responsible for paying – by about 6.2 percent. However, that provision is set to expire at the end of 2010. Additionally, the bill would provide $600 million for enhanced security along the U.S.-Mexico border.

Republicans cast the bill as an election-year present to teachers unions.

Carl Levin, D-Mich., said “there can be no doubt of the need for this bill,” particularly in this economic climate, where layoffs continue and job growth is sluggish.

“Failure to enact this extension would place services to those most in need at terrible risk, and it would place many States, including my own, in an untenable budget situation,” Levin said. “Failing to approve this funding would damage our nation now and in the future. The excuses our colleagues on the Republican side of the aisle have used to prevent passage of important legislation in recent weeks do not apply here. This measure is fully paid for.”

Judd Gregg, R-N.H., said the bill does contain an attempt to pay for its new spending, but that it does so by “penalizing job creators and forcing people to outsource jobs which, again, comes back to harm us for no purpose that seems to be practical other than to have the Federal Government step in and try to control the manner in which these various programs are run in the States and to reward constituencies who happen to be very supportive of the other party.”

By a vote of 61-39, the Senate passed the bill. Every Democrat present voted for the bill. All but two Republicans present voted against the bill. The end result is that the Senate passed a bill that would provide $16.1 billion for increased Medicaid funding to states and $10 billion in education funding for states.